GSK backs annual guidance, despite drop in Q3 sales, profit

Headline results for the third quarter:

  • Prescription drug sales: £4.2 billion ($5.4 billion), down 7%
  • Overall revenue: £8.6 billion ($11.1 billion; forecasts of £8.8 billion), down 8%
  • Profit: £1.4 billion ($1.8 billion), down 17%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

CEO Emma Walmsley remarked that GlaxoSmithKline "has responded well to a challenging operating environment this year," citing "strong commercial momentum in key growth products including Nucala, Trelegy, Benlysta, two drug-HIV regimens, Zejula, Shingrix and our priority consumer healthcare brands." The executive added "this, combined with improving vaccination rates this quarter, means we are on track to deliver within our earnings guidance range for 2020."

The drugmaker noted that the COVID-19 pandemic has impacted its performance in the first nine months of 2020, particularly when it comes to vaccines, but "during the third quarter, we have seen a recovery in vaccination rates, including adult immunisation rates in the US returning to prior-year levels in the last month of the quarter." 

Other results:

  • Vaccine sales: £2 billion ($2.6 billion), down 12%, largely driven by the adverse impact of the COVID-19 pandemic on shingles and meningitis vaccine uptake, partly offset by "strong demand" for influenza vaccines in the US
    • Fluarix/FluLaval: £445 million ($576 million), up 20%, reflecting a reversal of prior-year returns provision in the US
    • Shingrix: £374 million ($484 million), down 30%, driven by lower adult wellness visits and vaccination rates in the US, although a "strong performance" was recorded in Germany, while the shingles vaccine's launch in China also added to sales
    • Bexsero: £219 million ($283 million), down 14%, reflecting reduced demand in the US and internationally, partly offset by lower US returns and rebates
    • Menveo: £104 million ($135 million), down 2%, with lower demand mostly offset by lower returns and rebates in the US
  • HIV product sales: £1.2 billion ($1.6 billion), down 4%, with combined growth from the two-drug regimens Juluca and Dovato, which delivered sales of £222 million ($288 million), more than offsetting the decline seen with the triple combination drug Triumeq
    • Triumeq: £577 million ($747 million), down 11%
    • Tivicay: £377 million ($488 million), down 15%
    • Juluca: £123 million ($159 million), up 22%
    • Dovato: £99 million ($128 million)
  • New respiratory product sales: £978 million ($1.3 billion), up 21%, with growth from TrelegyRelvar/Breo and Nucala recorded in all regions, including the US where Relvar/Breo sales were up 64%, bolstered by a stronger market for inhaled corticosteroids/long-acting beta-agonists amid the COVID-19 pandemic
    • Ellipta product sales: £727 million ($942 million), up 21%
    • Nucala: £251 million ($325 million), up 24%
  • Benlysta: £186 million ($241 million), up 8%, including  £93 million ($120 million) in sales of the sub-cutaneous formulation
  • Zejula: £92 million ($119 million), up 44%, with sales of the PARP inhibitor comprising £57 million ($74 million) in the US and £33 million ($43 million) in Europe
  • Established pharmaceuticals sales: £1.7 billion ($2.2 billion), down 23%, hit by lower demand for antibiotics during the pandemic, government mandated changes encouraging the use of generics in markets such as France and China, and a strong comparator, including a European Relenza contract
  • Established respiratory product sales: £725 million ($939 million), down 23%
  • Seretide/Advair: £368 million ($477 million), down 12%, with lower sales in all regions due to generic competition
  • Consumer healthcare sales: £2.4 billion ($3.1 billion), down 4%, as COVID-19-related social distancing measures continue to "create volatility," especially within cold and influenza categories

Looking ahead:

GlaxoSmithKline reaffirmed that it expects adjusted earnings per share this year to decline by 1% to 4% at constant exchange rates, although most likely at the lower end of the range, assuming "sustained recovery of adult immunisation rates, particularly in Shingrix."

Walmsley also highlighted that the drugmaker is "advancing possible COVID-19 solutions with our partners, including clinical trials for antibody therapy VIR-7831 and three different adjuvanted vaccines. We expect to see data on all of these before the end of the year." Also on Wednesday, GlaxoSmithKline and partner Sanofi agreed to make available 200 million doses of their COVID-19 vaccine to the World Health Organization's COVAX facility.

Pipeline updates:

GlaxoSmithKline disclosed that the IL-33 receptor antagonist GSK3772847 for the treatment of asthma has been removed from Phase I expansion/ Phase II development.

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